“Everybody has a dream, right?” Becollan Mageto, a financial literacy trainer, asks a class of low-income female workers.
“We are here to make your dreams come true,” adds Ms Mageto, from Kenya, during the session at Al Fajer Ladies Accommodation in Dubai’s Al Quoz area.
The nine women tuning into Ms Mageto’s 30-minute session are all cleaners, from Ethiopia, Uganda, Nepal and the Philippines. They have all chosen to attend to learn how to build up a financial nest egg – so they can one day achieve their long-term dreams.
The workshop is all part of a free financial literacy programme organised by the money transfer company Western Union. Since the programme launched in November 2014, 9,000 low-income workers in labour camps and workers’ accommodation across the UAE (and another 9,500 in Saudi Arabia) have attended the sessions, which are conducted in eight languages.
Known as Apna Sapna – which translates as Our Dreams in Hindi and Urdu – the initiative is part of Western Union’s corporate social responsibility efforts.
“The goal is to ensure that several thousand workers can upgrade their status from ‘survival’ to ‘stability’, explains Hatem Sleiman, Western Union’s regional vice president – Middle East.
Low-income workers are not short on dreams: almost eight in 10 want to buy a house in their home country, 13 per cent wish to start a small business, while almost half aim to achieve both goals in the future, according to a 2015 survey by Western Union of 100 of their financial trainees in the UAE.
Attendee Juliet Nakaylma’s goal is to buy a car so that she can learn how to drive and then be able to transport her 10-year-old daughter and two-year-old son around when she eventually returns home. “I also want to buy some land”,” says the Ugandan.
Until then, Ms Nakaylma commutes to work by bus six days a week, passing billboards along the journey that depict a world quite different to the one she currently inhabits. “I don’t go outside our accommodation during my time off. I mean, for what?” says Ms Nakaylma, 36, who has been in Dubai for 15 months and earns Dh1,300 each month.
“I tell myself that I must save Dh1,000 of that, so I only spend Dh300. I buy a 5-kilo bag of rice for Dh20 in one week, I cook two cups, which is enough for me. Then I buy some potatoes for Dh10 and a kilo of sugar for Dh2. I find that Dh100 is enough to buy all my food for the month.”
She also spends Dh100 to cover her phone bill and Dh100 on other expenses.
“The rest of my money I try to keep aside, because I came here to work for my future,” she adds.
Rania Chidiac, Western Union’s director of communications for the Middle East and South Asia, says many of the programme attendees are – like Ms Nakaylma – very disciplined about money.
“To spend money is a luxury for them, because they are restricted with the transportation – they can’t just take a taxi to a shopping mall,” she explains. “Juliet Nakaylma is richer in some respects than a person I know who earns three times her salary, because she is saving – she is very specific about where her money is going, and she is very proud of the money she puts by.”
Rupa Vinod, the managing director of Right Track – another company backing the Apna Sapna initiative – agrees, saying that the new generation of low-income workers in the UAE are more focused than those she encountered 10 years ago.
“Those guys back then were much more about sacrifice for their children, and for their parents – saving money for a relatives’ cataract operation, for example. But the younger crowd is a lot more focused,” she says. “They send money home, but they are not demonstrative – they don’t show it as a sacrifice. They are building up a future for themselves – they know their worth. They know ‘If I am a carpenter then I must get this much – then I can marry a decent girl’.”
While Ms Nakaylma already has sound budgeting skills – thanks to her school education – her reason for attending the financial literacy workshop is to find out where best to deposit her savings.
“In the UAE, it’s not always possible for low income earners to open a bank account here as they need a minimum deposit or to show minimum monthly earnings,” explains Western Union financial trainer Syed Mohefarhan. “But they can save in National Bonds.”
To attract more blue-collar workers, in 2013 National Bonds lowered its threshold for entry to its Sharia-compliant Dirham Savings Scheme from Dh3,000 to Dh100 and revamped its prize structure to include more frequent smaller cash prizes. The option is open to anyone with a salary of Dh1,000 or more a month.
“It’s a good way of saving and it’s the safest way,” Mr Mohefarhan says. “But most people still choose to keep the money in their own country.” According to a 2013 study by UAE University, when low-income employees first arrive in the UAE they don’t expect to save from the outset. The survey of almost 1,000 migrant workers found that only 40 per cent were able save money in the first six months.
“Some people invested a lot of money in coming to the UAE from their home country”, says Mr Mohefarhan. “They have to first repay that debt, which often takes about two years.”
And there are the other, unforeseen barriers to saving. The International Labour Organization cites migrant workers and their families as “constantly exposed to various risks that require huge levels of spending, such as illnesses, accidents, natural and man-made disasters”.
Namrhamata David Srist, from Nepal, earns Dh1,200 a month as a cleaner at Dubai International Airport. Ms Srist has two daughters, aged 16 and 12. “During my three years in Dubai, I’ve managed to save around Dh6,000 which I’ve put into a life insurance policy back in Nepal,” she says. “I had to use the rest of my savings when the earthquake hit Nepal last year, to repair our home.” According to Western Union’s study, 73 per cent of migrant workers realise the importance of an emergency fund, but found the amount they put aside (starting at Dh100 every month) inadequate when there was a real emergency. Only half of respondents said they were able to save some of their income, while a quarter claimed to save 10 per cent of their income.
During Apna Sapna’s basic training, attendees are handed a booklet containing 10 personal finance principles and an income and expense tracker to fill in each month. It contains columns to write in groceries, telephone, clothes, medical, travel and other expenses.
“You should try to save at least 10 per cent of your earnings”, says Ms Mageto. “It’s very easy if you stay within your budget.”
Ms Srist is determined to make use of her new booklet. “Today, I learnt to put away something every month – I will do this now.”
A second booklet, rolled out earlier this year, focuses on country-specific savings options, listing schemes in India, Bangladesh and Pakistan – with more countries set to be added this year.
One savings vehicle which has been documented across the developing world, as well as in the UAE, is when a group of five or six trusted acquaintances trust one member to look after everyone’s cash for an assigned period of time.
This method is known as “committee” in India and Pakistan, “panwagan” in the Philippines, “Ekub” in Ethiopia, “Seettuva” in Sri Lanka, and “arisan” in Indonesia.
“This person will take maybe Dh500 from each member of the group every month and put everyone’s money into a box,” explains Mr Mohefarhan. “But we tell the workers not to trust anyone else with their money.”
Hilda Masendi, 23, from Uganda says some people in her accommodation rely on this – but she doesn’t take part herself. “We are all different nationalities here, you can’t trust people – you may give your money to someone who may resign and run away with your money.”
Family factor can drain hard-earned money
Hilda Masendi has only just started putting money aside from her Dh1,100 monthly wages after 17 months in the UAE.
“I borrowed some money to get me here and in my first year, my earnings went on paying that back,” says the 23-year old, from Uganda. “Now, I’m sending my money home to my mum, because she’s always asking me for money. I give it to her because she worked for me when I was young, so now I have to pay her back.”
Ms Masendi’s financial obligations to her family are common among low-income workers, who often find it hard to refuse requests for money from family members.
According to a 2015 survey from Western Union, 66 per cent of female respondents send money to their mothers, 23 per cent to their fathers and 20 per cent to siblings. Of the money remitted home, eight in 10 of those polled said it is used for family maintenance.
Atikha Overseas Workers and Communities Initiatives is a Filipino non-government organisation that addresses the social cost of migration. The executive director Estrella Mai Dizon Anonuevo, says the families of migrants sometimes “splurge their hard-earned money”.
“Filipinos and other Asians have particular difficulty saying no to demands of the family since culture dictates that one has to take care of the family”, he says.
The Filipina financial blogger Izza Glino says it’s expected for pinoys returning home for a holiday to give money and presents to their family.
“Once you have a family member working abroad, people expect you to be more well-off than the rest,” she says.
“This can be an obstacle if the family will not do their part in taking good care of the money.”
Ms Masendi’s generosity in the past has certainly cost her.
“My cousin told me she wanted to set up a business and asked me to send her money for capital,” she says.
“Then she started telling me different stories, that people grabbed money from her. I realised that she was just playing games with me. You have to be careful.”
After attending the training session, Ms Masendi says she now wants to focus on her own dreams, rather than support her family.
“I promised myself that I will buy some land for Dh5,000, then I will rent it out,” she adds. “Next time my mother asks me for money, I will not give it to her – I have to think of my future. If I save, then my plans will succeed.”